Cliffs Leads S&P 500, Up 18% This Month

By Sam Mamudi

Cliffs Natural Resources (CLF) is having a nice end to a tough year: the stock is up and leading the Standard & Poor’s 500 index today, and the price has risen 18% in December.

Of course, context is everything:

Even with the late-year bounce, Cliffs is still off 42% this year.

As we noted back in October, one reason for Cliffs’ decline is concern about China’s economy. But there are other reasons to like the stock, as we said:

The good news is that China’s slowdown won’t last forever. When it awakens, so will the sector.

Plus, both Cliffs and Vale (VALE) have massive dividends, each over 5%. That means you’ll be paid while you wait for the rebound.

That’s not to say there aren’t worries about Cliffs — as this piece notes, it has close to $4 billion in outstanding debt, and on Wall Street it’s a consensus Hold, according to FactSet — but maybe some investors have decided that’s a pretty worthwhile proposition.

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The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.